Rules on SOE purchases not enough

The abolition of a 1995 rule prohibiting foreign firms from buying state and legal person shares in listed companies is unlikely to produce a rush of purchases of state-owned enterprises, according to analysts quoted by South China Morning Post. Purchases of stakes held by government institutions and government-controlled enterprises are still subject to restrictions that will discourage many investors. The shares must be held for at least a year and any subsequent sale to another foreign entity would require central government approval. Deals involving the restructuring of enterprises would also need government approval. In addition, purchases would not be allowed in industries closed to foreign investment such as the defence sector, airlines and airports.